It is a great honor for me to open the Launching of the Trilateral Project on Cassava Exports Phase II jointly designed and implemented by the Ministry of Agriculture, Forestry and Fisheries of the Royal Government of Cambodia, the Ministry of Commerce of the People’s Republic of China, and UNDP.

The 2013 Human Development Report reported that the rise of the South is unprecedented in its speed and scale. The middle class in the South is growing rapidly in size, income and expectations. By 2030, two thirds of middle class is expected to reside in the Asia-Pacific region. It points further potential for the region’s growth. The report also points out that many countries have made substantial progress in the human development over the two decades. Several high achievers have transformed their human development prospects. One of the key drivers of high human development achievers is tapping of global markets. China and Cambodia are no exception. Cambodia’s tremendous efforts in integrating into ASEAN are acknowledged as a positive step in linking the country to global and regional markets and value chains. The country has progressed in integrating agriculture and trade in its development strategies. UNDP is proud to be associated with those efforts.

Yet, as noted in the Royal Government of Cambodia’s report prepared for the 2011 World Trade Organization Secretariat Trade Policy Review Meeting,
QUOTE -- “Cambodia has successfully met the challenges presented by the 2008-2009 world economic crises. However, events since 2008 clearly show the extent of Cambodia's exposure to external shocks. [.....] In the period ahead, the Royal Government will be striving to deepen and broaden Cambodia's integration into the world and regional trading systems. At the same time, the economy's exposure to negative shocks transmitted through this system must be reduced. The diversification of export products and export markets is the key to accomplishing this goal.” -- UNQUOTE

Recent work at the individual export sector level suggests that many of the opportunities for growth and diversification of Cambodia’s export basket will be increasingly found in regional and “emerging” markets broadly defined, including within ASEAN, the broader region of South East and East Asia, and other “emerging markets” as far as Central Asia and Russia. Early indication for cassava suggests a similar pattern.

Cassava, the second largest agricultural crop in Cambodia and growing rapidly, is a very striking example of how Cambodia could succeed in diversifying its export base and export markets.

Yet, Cambodia cassava farmers, processors and exporters face enormous constraints to make it a reality: price distortions in neighbouring countries, price volatility making farmers turning to other crops, lack of information on price and quality criteria of importing markets, lack of access to technology are chief reasons among those. In addition, if not properly mitigated, there are high risks: (1) Sanitary and Phyto Sanitary (SPS) risks for Cambodia-produced cassava and (2) excessive cassava production may have an adverse impact on soil quality. Even though Cassava has become the second largest agricultural crop in terms or income, employment, hectares cultivated, and exports, there is very little technical assistance support provided to the sector.

By strengthening and diversifying cassava exports, one key anticipated impact of the Trilateral Project on Cassava Exports is to promote job creation and poverty reduction, as the sector is labour-intensive, and recruits from a broad segments of the population, including those in some of the poorest regions of the country.

A second expected impact is to assist the Government in reducing the country’s vulnerability to possible future external shocks by focusing on strengthening current exports and pursuing the diversification of export base.

Third, implementation of the project will require Government to work closely with the private sector. Accordingly, this program should have a positive impact on Government-Private Sector dialogue and enhanced responsiveness of both to their respective needs and responsibilities.

Concretely, through the implementation of the country’s trade promotion strategy, it is expected that by 2018, Cambodia consolidates its exports of Cassava through direct exports to such countries as China and the Republic of Korea and lessens its dependency on exports of unprocessed tubers towards Thailand and Vietnam. This could mean reaching approximately 3 million MT of formal exports of dried cassava chips by 2018 and turning Cambodia from the seventh largest producer of cassava in Asia in 2011 into the fifth largest producers of cassava in Asia (following Thailand, Indonesia, India, and China PRC) by 2018.

UNDP Cambodia is pleased to support the economic diversification fostered by the RGC.

This support will take three distinct forms:

Bilaterally, as UNDP has partnered with the Ministry of Commerce of the Royal Government of Cambodia to update the country’s trade integration strategy 2013-2018, in which cassava and other commodity exports feature prominently,

Trilaterally, working with the Ministry of Agriculture, Forestry and Fisheries, with support from MOFCOM China and UNDP China in a Phase 2 of our existing partnership, to help a core group of cassava processors and exporters to meet the quality and quantity requirements to be able to export more processed cassava to China, thus generating revenue and possibly employment for Cambodian smallholders in rural areas.

At the multilateral level, UNDP will cooperate with the Ministry of Commerce of the RGC as well as the Enhanced Integrated Framework (EIF) programme for LDCs under the Cambodia Export Diversification and Expansion Programme II (CEDEP II). The programme will benefit from the lessons learnt and best practices of the trilateral project and seeks to increase export to more markets, most of them in Asia.

In the project for which we are gathered here today UNDP will give particular attention to the following dimensions:

UNDP is committed to helping Cambodia take the agricultural trade agenda forward to leverage the potential of agricultural trade for poverty reduction and human development, while at the same time contributing to moving away from the poverty gaps of informal trade. The test before us is to ensure that agricultural trade works to generate inclusive growth and achieve sustainable human development and to leverage private and public investment towards this end.

Let me conclude by thanking all of you who have contributed to the preparation of this trilateral programme. We look forward to receiving your collaboration in the successful implementation of this project.